Rent-seeking has a technical definition; earning money from things you invented does not meet it. While Salk is obviously an inspiring example, a wise society should happily incentivize the development of useful technology.
Intellectual monopolies disincentivize development and incentivize rent seeking. Here, rent seeking is legal action and lobbying intended to protect and extend monopolies, instead of advancing science.
Other than economic logic, we have natural experiments to back this up: i.e. the steam engine patent granted to Watt and Boulton in 1772 and its chilling effect on engine duty improvement (and the explosion of progress after patent expiry), and the modern pharmaceutical industry developing most strongly precisely where chemical patents were not granted, in 19th C. continental Europe, and slowing down wherever patent protections were eventually introduced, at the request of rent seeking lobbyists.
I agree with all of this. The example of the patent on steam engines is fascinating, thank you! It's certainly true government granted monopolies are far from the ideal incentive structure, with many downsides. (And lobbying for EG patent extensions likely IS rent-seeking). Advance market commitments and other systems likely have better characteristics.
I was rather objecting to the misuse of a technical term, and the idea that we should expect all innovation to happen without reasonable incentives.
There are incentives to developing medical technology beyond the opportunity to become obscenely wealthy. If you do so, you are necessarily depriving some subset of patients that need the treatment.
Honestly, I find it pretty unimaginative (and a bit disturbing) that the only “incentive” you can think of for treating sick children is the ability to monetize the treatment - it’s a virtuous endeavor in and of itself. I must say, though, it’s hardly surprising to meet someone with such a worldview on a VC-focused forum.
Edit:
> Rent-seeking is the act of growing one's existing wealth by manipulating the social or political environment without creating new wealth.
This aligns neatly with my comment - gatekeeping a medical treatment behind artificially high costs to enrich yourself is the very definition of rent-seeking. I think you’re digging yourself in to a pretty deep philosophical hole here, solely out of some need to nerdsnipe people to reassure yourself of your own intellect.
I'm not sure that argument is rigorous enough to be called a proof. We have no guarantee that the S&P 500 will grow faster than world wealth.
It's plausible it will, but one could reasonably purchase something like gold or BTC to hedge against scenarios where it doesn't.
>Wealth correlates with health correlates with better reaction times & general fitness
I agree with your general point, but you can't just join up 2 correlations like that, that isn't always going to work when there are other confounding factors (and there always are). Wealth also correlates with age which anticorrelates with reaction times and general fitness.
In case anyone's wondering, here's a simple example of 3 variables so that the first is positively correlated with the second, the second positively correlated with the third, but the first and the third have a negative correlation: simply take 3 independent standard normal variables, X, Y, Z, and define our 3 variables to be u=X+Y, v=Y+Z, w=Z-X. Then correl(u,v)=0.5, correl(v,w)=0.5 and correl(u,w)=-0.5.
Lower accident rates, or a lower percentage of injury or fatal accidents? I find it hard to believe 80 year olds are getting into fewer accidents than 40 year olds unless it’s because they drive less frequently.
Which would be fine for an insurer of course. Heck, even if they got into more incidents, but the incidents were cheaper, that would be fine for an insurer too.
And not all markets are equally competitive. Just because insurance rates differ doesn't mean risks necessarily do the same way. And let's not forget that while insurers are professional risk assessors that doesn't mean they're infallible either, or immune to other distortions (e.g. pass-the-buck subprime mortgage kind of issues).
The unreliability of those figures will be no surprise to anyone who follows China's economy or politics closely, and I hope this bodes for better quality statistics in the future.
There's a small industry of people who try to measure Chinese growth in other ways that are harder to forge such as railway shipment tonnage and energy consumption; it'll be interesting to see to what extent those methods are vindicated if/when better quality data becomes available.
Chinese GDP is not a sum of locally reported GDPs. Locally reported GDPs have always exceeded the total GDP, sometimes by a large margin. Now they may lag.
A large motivation is how the taxes collected are shared between the central government and the local governments. A new tax sharing scheme introduced last year makes underreporting of the local GDPs profitable for the local governments, meaning they get to remit less taxes to the central government.
If you look at large companies' accounts, they typically have inter segment reconciliations. Where intra-company trades are booked can be artificial. In the Chinese case, the city of Tianjin, e.g., which has a financial district, booked revenues from companies registered there but conducting no substantial business there in its own local GDP. This is akin to the state of Delaware including in its own GDP report (if there is such a thing) all companies registered there. But this inflation has no effect on the national GDP, which is aggregated over the businesses directly, so it does not matter how many provinces claim the businesses as their own. Hope this helps put things in context a little bit for you.
If we assume 20-30% of gdp claim from most of the provinces in China are fake, then that reduces their overall GDP from 11.2T to probably around 9-10T, only about double Japan's 5T, and about half of US's 19T and way less than EU's 17T. Nowhere near taking over US/EU anytime soon, and probably falling into a lost decade for China. And with the 3% gdp growth from US recently, US economy is looking very bright.
Easter and Western politics, socialize, communism, capitalism, share the same means to an end, political parties trying to retain power and often have nothing to do with the people.
If the underlying motivation for understanding or judging is to figure out what public policy to adopt, then the choice of what to do is simply what works best. If some people are irredeemable and locking them away forever ends up creating the safest and healthiest society for the most people, then judge away. If it turns out that helping people and understanding them where possible works better, do that. Most progress seems to me to originate in moving from the former to the latter, in moving more people out of the "irredeemable" category.
A big reason for the bias towards new things is that greenfield development is easier and more fun, especially in organisations that aren't capable of producing good software. Learning a new framework every couple of years makes sense if it means you get to avoid having to work on confusing spaghetti code from a decade ago.
This is the key point that is so often missed. Getting angry at Apple et al for following their incentives rationally is silly.
I'd love to see journalists doing a better job of explaining the failures of the tax system rather than peddling pointless outrage, but I suppose that they too are following their incentives rationally; outrage gets more clicks.
It's not silly. It's the first step in a long chain of events that hopefully will end up with a better tax code. Giving companies that do this bad PR incentivizes companies towards reporting loopholes instead of exploiting them.
I agree that I'm being a little silly, it's what my last line hinted at! I do think outrage is better directed at our legislators than at corporations though, but I don't hold out hope for substantive change either way.
I don't think outrage is better directed at legislators until there is some consensus on what would be changes to the tax code that would help alleviate this problem. I think we're a couple of steps from that and I see no reason why we shouldn't get angry at the large companies until they help us with that step. After all: they are the experts on loopholes and tax evasion!
Being angry at Apple can turn it into a value to behave "nice" If consumers decide to buy products of companies which don't play such tricks then we get the free market way of changing the behavior of those companies (... while it's unlikely to really have impact as along as everybody does it and consumers want cheap products)
>Getting angry at Apple et al for following their incentives rationally is silly.
That logic doesn't work because people do get mad at things they view as wrong even if they are currently legal (or were legal when they happened). In this case, people thing Apple has done wrong regardless of the legality of the action.
What is it about current agricultural practices that makes them unsustainable? I know there is a reliance on fossil fuels, but that seems like it could be overcome in the long term (1000 years) without needing to move to a decentralized system.
This happens with decentralized farms, too. The problem is not in the kind of farm, but with the techniques used. Tractor tillage increases yields, but is hell on topsoil.
Interesting, thank you. Aquifer depletion seems like a modest problem on a 1k year scale, there's plenty of water around generally. But I hadn't heard of topsoil depletion before; I wonder how difficult it will be to produce it artifically? It sounds like something that will soon be in demand.
There's plenty of water, but aquifers are tend to be tapped in areas with insufficient rainfall/access to rivers.
If you're drawing on the aquifer faster then it replenishes, it'll eventually run out. Sure, it'll replenish itself - eventually - but the land you were cultivating will be unusable for decades. In the meantime, all of your nice topsoil will turn to dust, and blow away.
>I wonder how difficult it will be to produce it artifically?
It's easier to conserve the soil that's already there than to make new soil. That said, there are techniques to increase the production rate of soil. Sheet mulching can create 4 inches of topsoil out of waste organic matter in 2-5 years (compared to thousands of years for natural processes).
Generally it's better to make soil "in place" because moving it breaks up important soil structures, leading to oxidization and nutrient loss.
